Obviously too late to reply to your particular post, but for others, I've found some outstanding eats in Penang:

On top of Penang Hill, the ABC (icy dessert) from the far corner stand. WOW! So many ABC/cendol/bo bo cha cha/ice kacang offerings are so inferior to this it's sad.

Indian dessert shop in Little India (Georgetown). I forget the name. I think it's New Something. But it's easy to spot. It's a large, clean shop with a large variety of interesting desserts. These are the best Indian desserts I've ever had. Their warm halwa was amazing. Also, they have such a huge variety of things I haven't seen even in the best shops in Singapore.

Passage Thru India. Nice sitdown restaurant. Fabulous Indian food from all over India, but I believe the core is South Indian/Tamil Nadu/Madras. Make sure to try the spiced lime juice. Wonderfully gracious service. I plan on making this my last meal in Penang.

Second floor of the Komtar. A Malaysian kuih stand. OMG great. The best things I've ever eaten for 10-15 cents. Yes, 10-15 cents a piece, LOL. Huge variety. I swear I'd have no problem shelling out $3 for one of these things as a snack in the USA.

All of this raving after spending three days in Penang. Yep, I'd say Penang lives up to the foodie hype! I didn't even mention a ton of tasty things like Penang asam laksa at the base of Kek Lok Si. Walk up and down Penang Hill and you won't feel guilty about eating about 10 meals/snacks in a day (for about $10).

Just wanted to put on record that, in my opinion, the best Malay restaurant in Penang must be Minah Restaurant in Bukit Gelugor. I had a meal there in Sep 2006 - had chicken curry, fish curry, Malay-style salad (ulam), fried French beans. What's amazing was that the curries tasted exactly as I remembered them when I first ate there in 1969! The current owner is the original (late) chef-owner's son, and they look strikingly alike.

Update: I was at Minah Restaurant again during a recent visit to Penang (5-9 Feb). There must have been a change of chefs - Minah's piquant & unique chicken curry now tasted totally different & was awfully bland! They tweaked the 40-year-old recipe!! What a huge disappointment.

I guess the next best Malay restaurant in Penang would be Amandari at 67 Kelawei Rd (Pulau Tikus district), opposite the Brazil Churrascarria.

Spend a morning at Pulau Tikus market. Possibly the best Nyonya food outside of private homes is served from a stall there (http://eatingasia.typepad.com/eatinga...). The corner coffee shop in front of the market serves a fine version of Hokkien mee (prawn soup noodles, the dish Penang is most known for in Malaysia) and there is a vendor cooking appam (Indian 'pancakes') over charcoal, a dying tradition (the charcoal part). The market also has a couple of wonderful Nyonya kuih (sweets) carts, a couple serving exceptionally thick, dark (and delicious) coffee, and an Indian vendor of putu mayam (aka string hoppers) cooked the old-fashioned way - steamed over bamboo. The market is hopping everyday but is esp busy/vibrant on weekends. Go on an empty stomach.